Political data point to Macron winning French presidential election – question is by what margin

Five years ago we wrote a comprehensive four-part guide to the 2017 French Presidential (and legislative) elections. It allied a qualitative breakdown of presidential candidates’ political bias and policy agendas to a detailed statistical analysis of the previous eight presidential elections (47 years of political data). We found a number of robust statistical relationships, including (contrary to popular belief) the

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Market snapshot, theatre of war

Since the Russian army’s full-scale invasion of Ukraine on 24th February most equity markets, government and corporate bond yields, commodity prices (energy, metals and agriculture), CDS spreads and major currencies have recorded significant intra-day volatility and outsized daily moves. Moreover, for all the “noise”, the current geopolitical crisis has accentuated multi-week trends in a number of financial market and economic

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United Kingdom: Inflation without benefits

Consumer demand in the United Kingdom remains modest, which we attribute to a combination of factors. These include still curtailed opportunities to spend on goods (stock constraints) and services (social distancing restrictions), an erosion in real earnings, wealthy households’ low propensity to spend and a paradigm shift in spending habits. We expect falling Covid-19 cases and an ongoing easing of

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Light at the end of long Eurozone tunnel?

The number of new daily cases of Covid-19 has remained at or near record-highs in most Eurozone countries, including Germany, France, Italy and Spain, and the number of deaths since 11th December has either risen materially from the previous corresponding period, albeit from low levels (France, Italy, Portugal and Spain), or been broadly stable (Germany). The majority of Eurozone governments,

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US: High inflation, rising yields, repeat

The US Bureau of Labor Statistics will release US CPI-inflation data for December today at 13.30 London time. Consensus forecast is for another set of record-breaking data but US CPI-inflation figures have been volatile since Spring 2021 and thus more difficult to accurately predict. Our take is that US companies have been rapidly raising the prices they charge consumers, particularly

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2021’s last (major) roll of the data and policy dice

Markets’ focus has in the past three weeks understandably been on the Omicron variant and the reaction function, present and future, of governments and central banks. The multiplication of social distancing restrictions and acceleration in booster jab programs in many major economies since late-November suggest that policy makers’ conviction that the Omicron variant will prove benign is still quite low.

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FX round-up – Calm before the next storm

The spike in US Treasury yield volatility last week, following the release of gangbuster US CPI-inflation data for October, partly fed through to other asset classes. However, volatility in US asset prices, including Treasuries , the US Dollar and S&P 500, has since subsided while global FX volatility is still low in absolute and historical terms. Depressed volatility in FX

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